World bank to support Malawi micro-finance institutions

By Singayazi Kaminjolo - The Nation

The World Bank has expressed satisfaction with the work done by microfinance institutions in the country. The bank has since pledged to
continue technical and financial support.

World Bank senior private sector development specialist Ephraim Chilima, made the commitment on Friday in Lilongwe at the Malawi
Microfinance Network (Mamn) 12th annual general meeting (AGM).

"We have seen improvement in the mobile payment system, which has penetrated the rural areas. The numbers of people that are banked
have increased tremendously since 2008. We are very satisfied with the performance," said Chilima.

He said World Bank will continue to support microfinance institutions in infrastructure and information technology.

"We are working with these microfinance institutions through our Financial Sector Technical Assistance Project. We are supporting them in
capacity building, financial literacy, improving the payment system and also continuing to support the mobile payment system. We are also
working with government on regulatory framework and also procedural framework. More importantly, we are working on the establishment
of microfinance institutions hub to create a good link between the microfinance institutions and national payment system structure," said
Chilima.

Mamn chairperson Fumbani Nyangulu said the creation of the microfinance hub will reduce transaction costs.

"The creation of the technology platform in the country are a good development Supporting infrastructure in terms of technology that all
microfinance institutions can tap from reduced transaction costs. This trickles to the borrower by the end of the day. When the transaction
costs go low the interest rate also goes low. We welcome the creation of this technology," said Nyangulu.

Mamn executive director Duncain Phulusa said the AGM will review performance rate for 2013 and also find solutions to challenges that the
institutions are facing.

According to Nyangulu, the microfinance sector portfolio is below MK10 million and last year they recorded repayment rate of 90 percent
which he said is a sign that their clients are able to repay the loans.